Asian stocks slipped in volatile trade on Wednesday, failing to extend Wall Street's rally as persistent worries about interest rates and inflation remained a key focus for investors, while the Japanese yen hit a fresh 24-year low against the dollar.

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MSCI's broadest index of Asia-Pacific shares outside Japan fell 1 percent, but was still up 1.39 percent on the more than five-week low it hit on Monday. Tokyo's Nikkei gave up early gains and was flat.

Investors are continuing to assess how worried they need to be about central banks pushing the world economy into recession as they attempt to curtail red hot inflation with interest rate increases.

Also read: Nikkei Edges Up As Investors Pause After Selloff

The main US share benchmarks rose 2 percent overnight on the possibility the economic outlook might not be as dire as thought during trade last week when the S&P 500 logged its biggest weekly percentage decline since March 2020.

"I think that this recent post-holiday bear market rally is a reflection of the uncertainty that investors have regarding whether we have seen the peak of inflation and Fed hawkishness or not – I think we're close," said Invesco global market strategist for Asia Pacific David Chao.

"Even though I suspect global equity markets could end higher at the end of the year than where we are today, it's conceivable to expect continued market volatility until it becomes clear that the Fed is not going to force the US economy into contraction in order to tamp down persistent levels of inflation."

In a sign Wall Street may not be able to repeat Tuesday's rally, S&P 500 and Nasdaq futures both fell over 0.5 percent. Chinese blue chips lost 0.4 percent, Hong Kong's Hang Seng Index fell 0.9 percent and Korea's KOSPI was down 1.78 percent.

Also read: Nikkei Edges Up With Wall Street Futures

US Federal Reserve chair Jerome Powell is due to start his testimony to Congress today with investors looking for further clues about whether another 75 basis point rate hike is on the cards at the Fed's July meeting.

Most other global central banks are in a similar situation, apart from the Bank of Japan, which last week pledged to maintain its policy of ultra-low interest rates.

The gap between low-interest rates in Japan and rising U.S. rates has been weighing on the yen, which hit a new 24-year low of 136.71 per dollar in early trading, before drifting firmer to 136.18.

Other currency moves were more muted on Wednesday, with the dollar index, which tracks the greenback against six peers, a touch firmer at 104.6. The yield on benchmark US 10-year Treasuries was fairly steady at 3.26.

Oil prices fell, with U.S. President Joe Biden expected on Wednesday to call for a temporary suspension of the 18.4-cents a gallon federal tax on gasoline, a source briefed on the plan told Reuters.

Brent dropped 2.1 percent to $112.27 a barrel, while US crude fell 2.21% to $108.09. Spot gold dropped 0.21 percent, trading at $1828.70 an ounce. Bitcoin continued to trade around $20,640 after falling as low as $17,592 last week.